JAKARTA – A number of indicators suggest that Indonesia’s 5.2% economic growth target for 2025 will be difficult to achieve.

Economic growth, as measured by Indonesia’s Gross Domestic Product (GDP), slowed to 4.87% in the first quarter of 2025, down from 5.11% in the same period last year.

This deceleration is not unique to Indonesia. Malaysia’s economic growth slowed to 2% in Q1 2025 from 2.5% a year earlier, while Singapore’s economy cooled to 3.8% from 5%.

According to data from Statistics Indonesia (BPS), the slowdown in Indonesia’s growth aligns with declines across all components of GDP, including household consumption, which eased from 4.89% to 4.91%.

Several economists attribute the weakening in household spending to a wave of layoffs earlier this year, which affected 18,610 workers as of February 2025.

A survey by Kompas Research and Development found that a majority of respondents are pessimistic about Indonesia’s economic condition. Two-thirds described the current economy as bad or very bad.

As previously reported by IDNFinancials.com, analysts forecast that Indonesia faces significant challenges in achieving its 5.2% growth target, despite a recent agreement between the United States and China to reduce mutual import tariffs.

“Growth in 2025 will struggle to even reach 5%, even with the US-China trade deal. Most real-sector business players and investors remain sceptical about the outcome,” one analyst stated.

This view is consistent with projections by global rating agency Fitch Ratings, which expects economic growth in Southeast Asia to reach only 4.9% in 2025.

Meanwhile, Indonesia’s tax revenue has only reached 14.7% of the 2025 state budget target. (KR/ZH)